A Touch of Realism, please…..
15/04/08
One of the ongoing perils of being a property professional in the UK is the constant barrage of questions from friends, family and assorted individuals about how the property market is doing.
When things are booming, this is a most pleasant position to be in – as you watch the beaming enquirers absorb the news that their home has just appreciated by another 8% or whatever.
Conversely, of course, the opposite is true and there is many a furrowed brow these days as the reality of the perceived housing slowdown sinks in.
I use the word “perceived” deliberately – as the current media hysteria from some of the national press and television is, once again, not letting facts get in the way of a good story…
“Ah, yes, but you would say that!” I hear you cry “It’s in your interests to talk the market up!”
Well then, let me give you some actual FACTS, and then suggest some positive action you could take if you are currently looking to sell your property….
The first fact is that here at Manning Stainton February saw a marked increase in new properties coming to market. And, more significantly, sales in that month were the best since June 2007!
The second, and perhaps more relevant fact comes not from me nor Manning Stainton but from Neil Parker, a market economist with Royal Bank of Scotland’s Global Banking and Markets division in London who recently gave a briefing to Manning Stainton’s New Home clients – builders and developers.
Neil said the fall in house prices was consistent with expectations and that a further fall could be expected before recovery begins:-
“Importantly, though” he said “the Bank of England’s interest rate setting body – the Monetary Policy Committee – have already begun the process of reducing interest rates to support growth, and the Chancellor has recently made some encouraging comments regarding a loosening of the fiscal purse strings”.
“We believe that the combination of a monetary and fiscal loosening will help the UK economy (and therefore the housing market) begin to recover, perhaps as early as the fourth quarter (Oct – Dec) of 2008”.
Neil also produced some impressive statistics which strengthened the view that we are probably in a market correction rather than a full blown recession.
So what has prompted the increase in sales at Manning Stainton I mentioned earlier?
It’s simply realistic thinking from our selling clients, accepting that prices which may have been achievable in mid 2007 are now a long distant aspiration.
Smart thinking now dictates that properties be priced for today’s market to attract buyers, and those with empty properties should adjust to current levels to avoid costs like Council Tax, ongoing maintenance, mortgage payments and the loss of interest which would accrue if their cash was in the bank…
Considerable sums which would not be offset by any rise in the property’s value.
And for those wishing to move up market please consider this:-
You are actually in a better position now than 12 months ago – as the market value of the property you want is likely to have reduced by more than the value of your own property in real terms.
It’s a challenging market, certainly, but realism on price now – whether buying or selling – will certainly be rewarded when the market inevitably turns upwards again.
